What Happens to Jointly Owned Property When One Owner Dies?
When one of the owners of a jointly owned property passes away, it can cause confusion among family members and loved ones as to what happens next with the asset. It is important to understand how jointly owned property is handled after someone has died so that you, as an owner of such an asset, know your rights. This article will explain what happens to jointly owned property when one of the owners dies and provide examples of how it is handled in real estate, bank accounts, and other financial assets.
What happens to a jointly owned property if one owner dies?
Following a death, what happens to jointly owned property depends on the type of property being considered - houses, other real estate, bank accounts, and other types of physical property can all have different rules and regulations associated with them. Generally speaking, when one of the owners dies, their share of the property will pass on to the surviving owner. In some cases, such as with real estate or bank accounts, title transfer paperwork may need to be completed to officially make the change of ownership.
Types of property
One of the first things to mention when it comes to jointly owned property is that much of the guidelines governing it can depend on the laws of your state. Laws often differ depending on the type of asset and location, so it is important to check with a lawyer or an estate administrator if you have questions on what applies to your specific situation.
Jointly owning a property with someone does not automatically mean that, should they die, you will inherit full rights to the property. Among other factors, this will be impacted by the type of property being discussed (e.g bank accounts vs. real estate).
Bank accounts
In general, joint bank accounts tend to have what's known as "automatic rights of survivorship", meaning that if one of the co-owners die, the other joint owner will get full rights to the account without having to go through probate (which includes getting ownership over the money in the account). However, this is only the case with joint bank accounts where both account holders are considered primary account holders. If you have a joint bank account with someone but you are the secondary account holder, you will not be able to access the account in the event of the primary account holder's death. In this case, the account is most often closed and you'll be unable to access funds unless you were able to gain access to them during the probate process.
If you're a joint account holder and are worried about what would happen to your money in the event of one account holder's death, it is a good idea to talk to your bank and double-check what the account holder's statuses are and whether or not the account has automatic rights of survivorship.
Are joint bank accounts frozen when someone dies?
If there are two names on a bank account and one person dies, the bank account will generally not be frozen. It will typically be frozen if the bank account has a primary account holder and a secondary account holder. If both account holders are primary account holders, the automatic rights of survivorship kick in and the other account holder will have access to the funds, without having to go through probate. This is why it's important to know what status you have on your joint bank account.
Real estate
Real estate has the same concept of rights of survivorship as bank accounts do, but the process of transferring ownership after one of the co-owners has died is a bit more drawn out. The process for this will depend on whether or not there was a last will and testament arranged for the deceased. If there is no last will and testament, then the state's laws of intestacy will apply and the property will be passed on to heirs as designated by law.
What happens to a jointly-owned house when someone dies?
When it comes to jointly owned real estate, the rules can vary depending on what state the property is in. In most cases, if someone dies and they are a co-owner of a property, the surviving co-owner will get full rights to that property without having to go through probate. This is especially the case if the property is designated as "joint tenancy with right of survivorship" (which is typically abbreviated as JTWROS).
If the jointly-owned real estate isn't JTWROS and is instead what's known as "tenancy in common", that owner's share of the property passes to their heirs, instead of the co-owner.
Another thing to note is that in a lot of states, the two terms "joint tenancy" and "joint tenancy with right of survivorship" are used interchangeably. At the same time, some states will need you to specifically designate the type of joint tenancy that you have on a property in order for the rights of survivorship to kick in. If this wasn't made clear at the start, and you happen to live in a state that requires a property owner to specifically request this type of designation, it may end up in you having tenancy in common which alters the way the property is transferred after death.
It is important to know what type of joint ownership was used when purchasing a home, as this could have an impact on what happens when one of the co-owners dies. It is also important to check with a lawyer or an estate administrator in order to understand exactly how the law applies to your specific situation.
What happens when one person on a deed dies?
If there are two names on a deed and one person dies, the other person will typically inherit the deceased's interest in the property. The exact process for this will depend on what type of joint ownership was used, as well as if there is a last will and testament in place.
If no last will and testament is present, then the state's laws of intestacy would apply and the surviving co-owner or deceased co-owner's heirs would typically inherit the deceased's share of the property according to state law. This is usually done through a process called "transfer on death".
Physical assets
Physical assets such as keepsakes, jewelry, and furniture are not typically subject to the same laws as real estate or bank accounts. In some cases, physical assets may be passed directly from one co-owner to the other in the event of death without having to go through probate. However, this depends on the type of asset and local laws-- it is always best to check with a lawyer or estate planner to get the most up-to-date information on what applies to your situation.
An exception to this is cars -- there are some states that have what's known as a 'transfer on death designation' for vehicles, meaning that if one of the co-owners passes away, the other can file paperwork to transfer ownership directly. Again, this depends on state laws and it is best to check with a lawyer or estate administrator.
In conclusion, what happens to jointly owned property when one of the owners dies will depend on both the type of joint ownership and state laws. When it comes to real estate, it is important to understand the differences between joint tenancy with right of survivorship and tenancy in common so that you can anticipate what will happen with your property in the event of a death (and with or without a will). Additionally, it is important to check with a lawyer or estate administrator to understand the specifics that apply to your unique situation.
